Primary Task Response: Within the Discussion Board area, respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
Big D Incorporated is nearing completion of its portfolio of recommendations for the outdoor sporting goods company. There are a wide range of measures that could be of value to the Board of Directors to consider.
Think of each measure as being a paint stroke in a corporate picture. By itself, it may not have much value. However, when combined with others, a picture is formed. The more variables examined regression, the clearer the picture. For example, consumer age, income, gender, background, industry, and interests could provide guidance to the best marketing approach to take.
Although past data are used to indicate the future, the social and economic impact of the coronavirus needs to be considered. What are the impacts to unemployment, income disruption, and recovery plan by each state?
Clearly state variables that you would utilize in your path that you are recommending. Utilize a regression model to determine if the recommendation is to expand into the new market or to not expand. Ensure that you provide adequate justification for your recommendations. The Board of Directors requires your input based upon your previous exercises from Units 1, 2, and 3.
Responses to Other Students: Respond to at least 2 of your fellow classmates about their Primary Task Response regarding items you found to be compelling and enlightening. To help you with your discussion, please consider the following questions:
Do you agree with your classmate’s decision? Why or why not?
What additional questions do you have after reading the posting?
What clarification do you need regarding the posting?
Why do you feel your decision would make more sound financial and business sense?
Additional Resources
Statisticshowto.com. (n.d.). Regression analysis: Step by step articles, videos, simple definitions. https://www.statisticshowto.com/probability-and-statistics/regression-analysis/
U.S. Bureau of Labor Statistics. (2020). Unemployment rates for states, seasonally adjusted. https://www.bls.gov/web/laus/laumstrk.htm
Franck, T., &Schoen, J. (2020). This map shows which states are seeing the most job losses due to the coronavirus. https://www.cnbc.com/2020/04/02/this-map-shows-states-are-seeing-the-most-job-losses-due-to-the-virus.html
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Capstone Project Assignment
attached
Balance Sheet_Horizontal
CAMPING WORLD HOLDINGS, INC.
Annual Report
Consolidated Balance Sheet – USD ($)
Increase or Decrease
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Amount
%
Current assets:
Cash and cash equivalents
$ 138,557
$ 224,163
$ (85,606)
-38.2%
Contracts in transit
53,214
46,227
6,987
15.1%
Accounts receivable, less allowance for doubtful accounts
85,711
79,881
5,830
7.3%
of $4,398 and $2,700 in 2018 and 2017, respectively
Inventories
1,558,970
1,415,915
143,055
10.1%
Prepaid expenses and other assets
51,710
41,138
10,572
25.7%
Total current assets
$ 1,888,162
$ 1,807,324
$ 80,838
4.5%
Property and equipment, net
359,855
198,022
161,833
81.7%
Deferred tax assets, net
145,943
152,683
(6,740)
-4.4%
Intangible assets, net
35,284
38,707
(3,423)
-8.8%
Goodwill
359,117
348,387
10,730
3.1%
Other assets
18,326
21,903
(3,577)
-16.3%
Total assets
$ 2,806,687
$ 2,567,026
$ 239,661
9.3%
Current liabilities:
Accounts payable
144,808
125,616
19,192
15.3%
Accrued liabilities
124,619
101,929
22,690
22.3%
Deferred revenues and gains
88,054
77,669
10,385
13.4%
Current portion of capital lease obligations
23
844
(821)
-97.3%
Current portion of Tax Receivable Agreement liability
9,446
8,906
540
6.1%
Current portion of long-term debt
12,977
9,465
3,512
37.1%
Notes payable – floor plan, net
885,980
974,043
(88,063)
-9.0%
Other current liabilities
39,211
32,662
6,549
20.1%
Total current liabilities
1,305,118
1,331,134
(26,016)
-2.0%
Capital lease obligations, net of current portion
– 0
23
(23)
-100.0%
Right to use liability
5,147
10,193
(5,046)
-49.5%
Tax Receivable Agreement liability, net of current portion
124,763
130,826
(6,063)
-4.6%
Revolving line of credit
38,739
– 0
38,739
ERROR:#DIV/0!
Long-term debt, net of current portion
1,152,888
907,437
245,451
27.0%
Deferred revenues and gains
67,157
64,061
3,096
4.8%
Other long-term liabilities
79,958
51,589
28,369
55.0%
Total liabilities
2,773,770
2,495,263
278,507
11.2%
Commitments and contingencies
Stockholder’s equity
Additional paid-in capital
– 0
42,520
(42,520)
-100.0%
Retained (deficit) earnings
(3,370)
7,619
(10,989)
-144.2%
Total stockholders’ equity attributable to Camping World Holdings, Inc.
44,538
50,511
(5,973)
-11.8%
Non-controlling interests
(11,621)
21,252
(32,873)
-154.7%
Total stockholders’ equity
32,917
71,763
(38,846)
-54.1%
Total liabilities and stockholders’ equity
2,806,687
2,567,026
239,661
9.3%
Class A common stock
Common stock
372
367
5
1.4%
Total stockholders’ equity
372
367
5
1.4%
Class B common stock
Common stock
5
5
– 0
0.0%
Total stockholders’ equity
5
5
– 0
0.0%
Class C common stock
Stockholders’ equity:
Common stock
Additional paid-in capital
$ 47,531
$ 42,520
$ 5,011
11.8%
Balance Sheet_Component %
CAMPING WORLD HOLDINGS, INC.
Annual Report
Consolidated Balance Sheet – USD ($)
Component Percentages
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Current assets:
Cash and cash equivalents
$ 138,557
$ 224,163
4.9%
8.7%
Contracts in transit
53,214
46,227
1.9%
1.8%
Accounts receivable, less allowance for doubtful accounts
85,711
79,881
3.1%
3.1%
of $4,398 and $2,700 in 2018 and 2017, respectively
0.0%
0.0%
Inventories
1,558,970
1,415,915
55.5%
55.2%
Prepaid expenses and other assets
51,710
41,138
1.8%
1.6%
Total current assets
$ 1,888,162
$ 1,807,324
67.3%
70.4%
Property and equipment, net
359,855
198,022
12.8%
7.7%
Deferred tax assets, net
145,943
152,683
5.2%
5.9%
Intangible assets, net
35,284
38,707
1.3%
1.5%
Goodwill
359,117
348,387
12.8%
13.6%
Other assets
18,326
21,903
0.7%
0.9%
Total assets
$ 2,806,687
$ 2,567,026
100.0%
100.0%
Current liabilities:
Accounts payable
144,808
125,616
5.2%
4.9%
Accrued liabilities
124,619
101,929
4.4%
4.0%
Deferred revenues and gains
88,054
77,669
3.1%
3.0%
Current portion of capital lease obligations
23
844
0.0%
0.0%
Current portion of Tax Receivable Agreement liability
9,446
8,906
0.3%
0.3%
Current portion of long-term debt
12,977
9,465
0.5%
0.4%
Notes payable – floor plan, net
885,980
974,043
31.6%
37.9%
Other current liabilities
39,211
32,662
1.4%
1.3%
Total current liabilities
1,305,118
1,331,134
46.5%
51.9%
Capital lease obligations, net of current portion
– 0
23
0.0%
0.0%
Right to use liability
5,147
10,193
0.2%
0.4%
Tax Receivable Agreement liability, net of current portion
124,763
130,826
4.4%
5.1%
Revolving line of credit
38,739
– 0
1.4%
0.0%
Long-term debt, net of current portion
1,152,888
907,437
41.1%
35.3%
Deferred revenues and gains
67,157
64,061
2.4%
2.5%
Other long-term liabilities
79,958
51,589
2.8%
2.0%
Total liabilities
2,773,770
2,495,263
98.8%
97.2%
Commitments and contingencies
Stockholder’s equity
Additional paid-in capital
– 0
42,520
0.0%
1.7%
Retained (deficit) earnings
(3,370)
7,619
-0.1%
0.3%
Total stockholders’ equity attributable to Camping World Holdings, Inc.
44,538
50,511
1.6%
2.0%
Non-controlling interests
(11,621)
21,252
-0.4%
0.8%
Total stockholders’ equity
32,917
71,763
1.2%
2.8%
Total liabilities and stockholders’ equity
2,806,687
2,567,026
100.0%
100.0%
Class A common stock
Common stock
372
367
Total stockholders’ equity
372
367
Class B common stock
Common stock
5
5
Total stockholders’ equity
5
5
Class C common stock
Stockholders’ equity:
Common stock
Additional paid-in capital
$ 47,531
$ 42,520
Operations_Horizontal
CAMPING WORLD HOLDINGS, INC.
Annual Report
Increase or Decrease
Increase or Decrease
Consolidated Statement of Operations – USD ($)
2017 to 2018
2016 to 2017
shares in Thousands, $ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Amount
%
Amount
%
Revenue
Total revenue
$ 4,792,017
$ 4,279,830
$ 3,516,307
$ 512,187
12.0%
$ 763,523
21.7%
Costs applicable to revenue (exclusive of
depreciation and amortization shown
separately below):
Total costs applicable to revenue
3,429,085
3,038,916
2,522,574
390,169
12.8%
516,342
20.5%
Operating expenses:
Selling, general, and administrative
1,069,359
853,160
691,884
216,199
25.3%
161,276
23.3%
Debt restructure expense
380
387
1,218
(7)
-1.8%
(831)
-68.2%
Depreciation and amortization
49,322
31,545
24,695
17,777
56.4%
6,850
27.7%
Goodwill impairment
40,046
– 0
– 0
40,046
ERROR:#DIV/0!
– 0
ERROR:#DIV/0!
Loss (gain) on sale of assets
2,810
(133)
(564)
2,943
-2212.8%
431
-76.4%
Total operating expenses
1,161,917
884,959
717,233
276,958
31.3%
167,726
23.4%
Income from operations
201,015
355,955
276,500
(154,940)
-43.5%
79,455
28.7%
Other income (expense):
Floor plan interest expense
(38,315)
(27,690)
(18,854)
10,625
-38.4%
8,836
-46.9%
Other interest expense, net
(63,329)
(42,959)
(48,318)
20,370
-47.4%
(5,359)
11.1%
Loss on debt restructure
(1,676)
(462)
(5,052)
1,214
-262.8%
(4,590)
90.9%
Tax Receivable Agreement liability adjustment
(1,324)
100,758
– 0
102,082
101.3%
100,758
ERROR:#DIV/0!
Total other income (expense)
(104,644)
29,647
(72,224)
134,291
453.0%
(101,871)
141.0%
Income before income taxes
96,371
385,602
204,276
(289,231)
-75.0%
181,326
88.8%
Income tax expense
(30,790)
(154,910)
(5,800)
(124,120)
80.1%
149,110
-2570.9%
Net income
65,581
230,692
198,476
(165,111)
-71.6%
32,216
16.2%
Less: net income attributable to non-controlling interests
(55,183)
(200,839)
(9,591)
(145,656)
72.5%
191,248
-1994.0%
Net income attributable to Camping World Holdings, Inc,.
10,398
29,853
188,885
(19,455)
-65.2%
(159,032)
-84.2%
Earnings per share of Class A common stock:
Basic
$ 1.12
$ 0.08
Diluted
$ 1.12
$ 0.07
Class A Common stock
Other income (expense):
Net income
65,581
230,692
11,113
Less: net income attributable to non-controlling interests
(55,183)
(200,839)
(9,591)
Earnings per share of Class A common stock:
Basic
$ 0.28
$ 1.12
$ 0.08
Diluted
$ 0.28
$ 1.12
$ 0.07
Weighted average shares of Class A common stock outstanding
Basic
36,985
26,622
18,766
Diluted
88,878
26,622
83,602
Operations_Component %
CAMPING WORLD HOLDINGS, INC.
Annual Report
Consolidated Statement of Operations – USD ($)
Component Percentages
shares in Thousands, $ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Revenue
Total revenue
$ 4,792,017
$ 4,279,830
$ 3,516,307
100.0%
100.0%
100.0%
Costs applicable to revenue (exclusive of
depreciation and amortization shown
separately below):
Total costs applicable to revenue
3,429,085
3,038,916
2,522,574
71.6%
71.0%
71.7%
Operating expenses:
Selling, general, and administrative
1,069,359
853,160
691,884
22.3%
19.9%
19.7%
Debt restructure expense
380
387
1,218
0.0%
0.0%
0.0%
Depreciation and amortization
49,322
31,545
24,695
1.0%
0.7%
0.7%
Goodwill impairment
40,046
– 0
– 0
0.8%
0.0%
0.0%
Loss (gain) on sale of assets
2,810
(133)
(564)
0.1%
-0.0%
-0.0%
Total operating expenses
1,161,917
884,959
717,233
24.2%
20.7%
20.4%
Income from operations
201,015
355,955
276,500
4.2%
8.3%
7.9%
Other income (expense):
Floor plan interest expense
(38,315)
(27,690)
(18,854)
-0.8%
-0.6%
-0.5%
Other interest expense, net
(63,329)
(42,959)
(48,318)
-1.3%
-1.0%
-1.4%
Loss on debt restructure
(1,676)
(462)
(5,052)
-0.0%
-0.0%
-0.1%
Tax Receivable Agreement liability adjustment
(1,324)
100,758
– 0
-0.0%
2.4%
0.0%
Total other income (expense)
(104,644)
29,647
(72,224)
-2.2%
0.7%
-2.1%
Income before income taxes
96,371
385,602
204,276
2.0%
9.0%
5.8%
Income tax expense
(30,790)
(154,910)
(5,800)
-0.6%
-3.6%
-0.2%
Net income
65,581
230,692
198,476
1.4%
5.4%
5.6%
Less: net income attributable to non-controlling interests
(55,183)
(200,839)
(9,591)
-1.2%
-4.7%
-0.3%
Net income attributable to Camping World Holdings, Inc,.
10,398
29,853
188,885
0.2%
0.7%
5.4%
Earnings per share of Class A common stock:
Basic
$ 1.12
$ 0.08
Diluted
$ 1.12
$ 0.07
Class A Common stock
Other income (expense):
Net income
65,581
230,692
11,113
Less: net income attributable to non-controlling interests
(55,183)
(200,839)
(9,591)
Earnings per share of Class A common stock:
Basic
$ 0.28
$ 1.12
$ 0.08
Diluted
$ 0.28
$ 1.12
$ 0.07
Weighted average shares of Class A common stock outstanding
Basic
36,985
26,622
18,766
Diluted
88,878
26,622
83,602
Ratio Analysis
2018
2017
2016
2018
2017
2016
Net Income
65,581
230,692
11,113
Net Income
65,581
230,692
11,113
Return on Equity (ROE) =
Average Total Stockholders’ Equity
52,340
(36,187)
(219,499)
Avg SE
52,340
(36,187)
(219,499)
Ending SE
32,917
71,763
(144,137)
=
125.3%
637.5%
5.1%
Beginning SE
71,763
(144,137)
(294,860)
Year
2018
2017
2016
ROE
125.3%
637.5%
5.1%
ROE 1.2529805120366833 6.3749965457208386 5.0629047578912838E-2